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Power of Attorney does not confer ownership interest in Real Estate transactions (3)

The wordings of a Power of Attorney are strictly construed as they are. So it is important for a donor to know exactly what powers he wants to confer and what the limits of the powers will be. Usually, before a lawyer drafts a Power of Attorney for his client, he will ask a series of questions of the donor so that at the end of the day what is stated in the Power of Attorney is the true intention of the donor. A Power of Attorney can be revoked expressly, impliedly or by operation of law. An express revocation leaves one without doubt. The revocation is communicated, usually in writing, that the powers have been revoked. The form of an express revocation will depend on how the Power of Attorney was created. If it was created by a deed; then the revocation has to be done by a deed simplicita.

Where the donor gives a Power of Attorney to a donee and then still goes ahead to deal with the subject matter of the Power of Attorney in a way that makes it impossible for the Donee to effect his authority under the Power; an implied revocation would arise from the actions of the donor. The fact of the donor giving a Power of Attorney does not extinguish his right to do the same act or do with his property what he wishes.

For instance, where a land owner gives a Power of Attorney to an agent to sell his land and then goes ahead to sell the land himself, before the agent has done so, it can be implied that the Power of Attorney has been revoked. This is very aptly made In the case of Chime v. Chime:

“… The better view is that so long as the donee has not exercised the power comprised in the Power of Attorney it is clearly open to the donor to exercise the same power. Therefore, where the donee has in fact exercised the power under the Power of Attorney the donor’s power in this regard expires.” Wali, JSC, Chime v. Chime, (Supra. at page 34, paragrah. A.)

It is very important to note that Revocation by operation of law simply means that the law provides certain circumstances that automatically revoke a Power of Attorney. If the donor dies, becomes insane or bankrupt, or suffers any other legal incapacity while the Power of Attorney is still subsisting, then those aforementioned situations will revoke the Power of Attorney. There are however exceptions to this general rule such as where the Power of Attorney is coupled with an interest, it is irrevocable until the interest is exhausted. That means, for instance, if a donor grants the donee power to collect rents from his property to set off a debt owed to the donee, the Power of Attorney is not revoked until the debt sum has been realized by the donee in the circumstance.

Power of Attorney is not given as proof of transfer of land asset to a buyer. When using a Power of Attorney to deal with land matters, there are quite a few rules, and in some instances those rules vary from state to state. In this regard, it is important to know that a Power of Attorney does not confer interest in land. Therefore, on the purchase of land, where the seller grants the buyer a Power of Attorney, as is the practice in so many cases, the buyer must perfect his title to that land in the form prescribed by the law so that his interest in the land is protected. Anything different from this is a wild goose chase!

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